.Canada’s Vancouver has been suffering a mirror-image of Auckland’s runaway housing price boom. Like Auckland, average house prices were past the $900,000 mark. Canadians were being locked out of buying their own home by cashed-up foreign speculators.

Last month, the State government of British Columbia imposed a 15% sales tax on foreign house buyers (Chinese, Americans, etc) and the result has deterred foreign speculators.

Here in New Zealand, National is obsessed with it’s free-market doctrine and is willing to sacrifice our tradition of home-ownership. Foreign (and homegrown) speculators are inflating a housing bubble that is not only unfair to New Zealanders wanting to buy their own home, but is ultimately unsustainable.

Unless we literally want to become tenants in our own country, the sale of houses to non-New Zealanders must be banned immediatly. The free-market doctrine serves wealthy overseas investors, as well as local speculators, but not New Zealanders wanting their own homes.

I urge those who vote National to consider what sort of country they want to live in, and what sort of country they want to leave their children.

If National voters think that money is all that matters, then we truly will get the kind of society we deserve..-Frank Macskasy

.If what Deputy Governor, Grant Spencer, says is true that investor-speculators are buying up to 41% of Auckland house purchases – then we have a major problem on our hands.

No matter how many houses are built; no matter how far Auckland spawls; no matter how many parks are swallowed up; no matter what kind of LVR restrictions the Reserve Bank implements; no matter how much money is thrown at the problem – nearly half of all houses will be snapped up by speculators.

Whether those speculators come from Berlin, Boston, or Beijing – or even just north of the Bombay Hills – does not matter one jot.

This government has shown itself to be utterly hopeless at controlling speculation, and the horrendous fact that housing prices have risen 24% over the last year in Auckland is evidence of their incompetance.

Meanwhile young couples wanting to buy their first home are locked out of the market because of the relentless greed of a few.

This is not what I thought New Zealand would look like in the 21st century.

It is not the flag we should be looking at changing – but our blase attitude to something very wrong with our society.

..FROM: "f.macskasy" SUBJECT: Letters to the EditorDATE: Tue, 28 Jan 2014 22:32:06 +1300TO: "NZ Herald" letters@herald.co.nz .The Editor
NEW ZEALAND HERALD
.
HSBC chief economist, Paul Bloxham, describes New Zealand as
the "rock star" economy among OECD nations.
I hope not. Rock stars have a nasty habit of burning out
early (the Rolling Stones being an exception) through drugs,
booze, and other nasty vices.
I recall that Ireland was described as the "Celtic Tiger"
between 1995 and 2000 - until it's economy crashed and
burned later. It's massive foreign investment led to an
unsustainable property boom which collapsed like a house of
cards in 2008 with the GFC.
The "Celtic Tiger" has lessons for our own nation, as we
also face an unsustainable property boom and associated
private debt that, by 31 June 2012, reached a staggering
$256.4 billion, or 125.3% of GDP (ref; RBNZ).
I've no doubt that the HSBC - a UK-based bank - is loving
our "rock star" economy. They are no doubt amongst big
lenders, funding our property speculation habit.
Trouble is, like most suppliers of a "habit", they will
eventually seek payment-in-full.
That's when we'll see how rock stars crash.
-Frank Macskasy(address & phone number supplied)

Despite recent assurances from the Prime Minister, John Key, to restrict foreign purchases of NZ farmland, his assurances that, “I think we’re making progress in this area” seems to be based on empty words and little more.

As the Dominion Post reported last year, “an average of 82 hectares of agricultural land per day has been approved for sale to offshore investors”.

Some recent headlines bear out that report,

It seems quite clear that John Key’s optimistic view that ” I think we’re making progress in this area” is wildly misplace. As usual, his soothing, reassuring words bear little relationship to reality.

But voters have yet to figure that out, collectively.

What the New Zealand public does understand, with crystal clarity, is that selling our farmland to overseas investors is counter-productive; counter-intuitive; and short-sighted economically.

It also cheats our children of their birthright.

New Zealand farmland is over-priced and farmers have gotten into trouble with massive bankloans and reducing equity. In part, this is due to the weasy credit that has been available to NZ society since 1985, when our banking system was de-regulated by you-know-who.

De-regulation meant that vast amounts of money flowed into NZ, for banks to lend out as mortgages, investments, loans, etc.

It also meant that, as money-supply increased, so did property prices. Quite simply, we could expect to sell our properties because there was an endless supply of money available from banks. Purchasers could borrow 80%, 90%, and sometimes 100% for mortgages.

So property prices went up. Our borrowings went up. Demand went up, as speculation was tax-free (remember that there is no Capital Gains Tax in NZ). It was an uncontrolled spending spree, without any consideration that eventually, the bubble would burst.

Well, in 2008, the bubble burst. In early 2008, there were signs that there was a crisis looming in the US banking industry. On 3 March 2008, the Federal Deposit Insurance Corp, the US federal agency that backs bank deposits, identified 76 banks as in trouble , a 52% increase from a year ago.

By July 2008, Freddie Mac and Fannie Mae, were in severe financial trouble.

On 15 September 2008, Lehmann Bros, in Wall St, New York, filed for bankruptcy. The subsequent chain reaction of banking failures sparked a global financial crisis and the world fell headlong into a recession.

Here in NZ, credit dried up, and suddenly our farms were no longer worth the high prices that people had been paying for them. The property boom came grinding to a halt, and the “bubble” well and truly burst.

We could no longer afford to buy over-priced properties to make speculative profits that had been financed using money borrowed from overseas. It was time to pay the Piper.

For many owners of farmland, the obvious solution seems to be to sell properties to overseas interests. Foreigners have the necessary capital – which local New Zealanders do not.

Unfortunately, in doing so, we are effectively locking-out our next generation from the opportunities that our generation – the massive-borrowing, heavily-indebted, Baby Boomers – had enjoyed. We have played “monopoly” with our farms; making ever-increasing profits; as we sold land to each other in a kingd of mad, money-go-round.

Now, we can only save our indebted ‘skins’ by selling out to foreign interests.

This is simply another chapter of the story I told here; “Greed is Good?“.

Is it fare, I ask myself, that we have priced farm land out of reach of our children?

Is it fare, I ask myself, that instead of our children enjoying the same opportunities that we did – that instead it will be Germans , Americans, Swiss, Chinese, etc, who will now reap the benefits?

The greed and naked self-interest of Bany Boomers is well known. It is no secret that we have looted the wealth of this country, and have left our children with fewer prospects than we enjoyed. No wonder so many of them have left New Zealand, and plan never to return,

“A Victorian-based Kiwi with a student loan debt, who did not want to be named because he did not want to be found by the Government, said he did not intend to pay back any of his student loan.

The 37-year-old’s loan was about $18,000 when he left New Zealand in 1997. He expected it was now in the order of $50,000. The man was not worried about being caught as the Government did not have his details and he did not want to return to New Zealand.

“I would never live there anyway, I feel just like my whole generation were basically sold down the river by the government. I don’t feel connected at all, I don’t even care if the All Blacks win.

“I just realised it was futile living [in New Zealand] trying to pay student loans and not having any life, so I left. My missus had a student loan and she had quite a good degree and she had paid 99c off the principal of her loan after working three years.” – Source

As we lose more and more farmland to overseas ownership, we should also expect some fairly noticeable consequences to follow;

1. Profits will flow back overseas, to offshore investors’ banks. This will impact on our Balance of Payments (negatively, I might add). This, in turn, will affect our sovereign credit rating; the interest rates we pay for money we borrow… and finally, our mortgages.

2. As farm produce fetches higher prices overseas, expect to see this reflected in the price of dairy products and meat that we purchase in our supermarkets. We have already experienced the high cos of milk and cheese, due to high prices overseas. Expect this to worsen.

Property and farm owners may object. They will squeal like stuck pigs, in fact. But the sale of our land to foreigners, whether American or Chinese; Australian or German; will eventually impact impact negatively on our economy and on the prospects of our children.

Enough is enough. No more pandering to the self-interest of Baby Boomers.

It is time that common sense kicked in. The sell-off of our country has to stop. Otherwise, as John Key warned, we will become tenants in our own land.